Company Announcements

EVRAZ Q2 2019 TRADING UPDATE

31 July 2019 - EVRAZ plc (LSE: EVR; "EVRAZ" or the "Group") today released its trading update for the second quarter of 2019.

Q2 2019 vs Q1 2019 HIGHLIGHTS

·      In Q2 2019, EVRAZ' consolidated crude steel output remained flat QoQ.

·      Total steel product sales rose by 7.7% QoQ, driven by higher demand. Sales of finished products climbed by 10.1% due to higher sales of construction products in Russia and railway products in North America.

·      Raw coking coal production grew by 2.2% QoQ. Raw coking coal concentrate output climbed by 21% QoQ to 4.5mt, mainly due to greater processing volumes and lower ash content.

·      External sales volumes of coking coal products surged by 10.3% QoQ due to increased coking coal concentrate sales after the longwall repositioning at Yuzhkuzbassugol's Alardinskaya mine in Q1 2019 and greater shipments to Russia's Far East. This was partly offset by lower raw coking coal sales amid lower demand at the markets in Eastern Europe.

·      External sales of iron ore products dropped by 49.4% QoQ as volumes were redistributed towards exports amid reduced demand on the domestic market.

·      Sales of final vanadium products rose by 29.7% QoQ, as lower prices and FeV stocks at end users have stimulated spot demand, particularly in the EU, Asia and North America.

Note. Numbers in this table and the tables below may not add up to totals due to rounding.

¹ The Q2 2019 production and sales volumes of EVRAZ North America are preliminary.

² The Q1 2019 data have been adjusted.

³ The H1 2018 data have been adjusted.

⁴ in tonnes of pure vanadium

STEEL SEGMENT

Total production volumes

Note. Numbers in this table and the tables below may not add up to totals due to rounding.

¹ from Coal segment

² in tonnes of pure vanadium

In Q2 2019, EVRAZ` pig iron and crude steel output remained mostly flat QoQ at the Russian mills.

Output of iron ore products fell by 2.8% QoQ to 3.5mt, mainly due to unscheduled downtime of burning machine no. 1 at EVRAZ KGOK and a planned maintenance outage of the Tashtagol mine at Evrazruda.

Total sales volumes

Note. Numbers in this table and the tables below may not add to totals due to rounding.

¹ includes tonnes of pig iron

² The H1 2018 data have been adjusted.

³ in tonnes of pure vanadium

In Q2 2019, external sales of steel products rose by 6.3% QoQ, primarily due to higher demand. Sales of semi-finished products were mostly flat QoQ.

Sales of finished products grew by 11.4% QoQ, mainly driven by higher sales of construction products, which rose by 10.8% QoQ following an uptick in demand due to the construction season. 

Sales of final vanadium products climbed by 29.7% QoQ, as lower prices and FeV stocks at end users have stimulated spot demand, particularly in the EU, Asia and North America.

Average selling prices

¹ includes prices for pig iron

² US$/kgV

In Q3 2019, pig iron and crude steel production volumes are expected to remain flat.

STEEL, NORTH AMERICA SEGMENT

Production and sales volumes¹

¹ The Q2 2019 production and sales volumes data are preliminary.

In Q2 2019, total output of steel products surged by 10.0% QoQ, with EVRAZ Pueblo's output up 13.1% QoQ amid greater downstream demand following the rail mill restart after unplanned downtime in Q1 2019. 

Sales of semi-finished products jumped by 82.1% QoQ following higher demand from customers.

Sales of construction products rose by 4.5% QoQ due to higher demand and favourable weather.

Railway product sales climbed by 18.8% QoQ, as production volumes recovered after the rail mill outage in Q1 2019.

Sales of flat-rolled products went up by 5.0% QoQ as a result of a planned maintenance outage and a railcar supply shortages in Q1 2019.

Tubular product sales edged up by 1.6% QoQ due to the restart of coating operations at EVRAZ Regina.

Average selling prices

Prices for construction products went down in Q2 2019, primarily driven by falling scrap prices and sluggish market demand. Prices for flat-rolled products were lower during the period as service centres temporarily curtailed purchases amid rapidly falling scrap prices and market uncertainty, which in turn was driven by soft demand. Prices for tubular products decreased slightly during Q2 2019, reflecting softening oil country tubular goods (OCTG) markets in addition to a seasonal decline in demand.

In Q3 2019, crude steel output is expected to remain at the average level seen in Q1-Q2 2019. Tubular sales volumes should increase compared with Q2 2019, as OCTG is expected to show healthier volumes. Meanwhile, volumes of line pipe and large-diameter pipe are expected to benefit from delayed coating and delivery recognition in Q2 2019. Sales of flat-rolled products are forecast to marginally improve over the Q2 2019 volumes, driven by customer production schedules and an expected uptick in purchasing activity from service centres.

COAL SEGMENT

Production volumes

In Q2 2019, overall raw coking coal output rose by 2.2% QoQ, primarily due to higher production at Yuzhkuzbassugol's mines following a longwall move at the Alardinskaya mine in Q1 2019. This was partly offset by lower production volumes at the Raspadskaya mine due to a longwall move in Q2 2019.

Output of coking coal concentrate climbed by 22.9%, primarily due to greater processing volume and reduced ash content.

Sales volumes

* The data include sales volumes of 1kt of coal recognised as steam-grade coal based on its quality characteristics.

In Q2 2019, external sales volumes of coking coal products surged by 10.3% due to increased coking coal concentrate sales after the longwall repositioning at Yuzhkuzbassugol's Alardinskaya mine in Q1 2019 and greater shipments to Russia's Far East, which was partly offset by lower raw coking coal sales amid lower demand at the markets in Eastern Europe.

¹ The Q1 2019 data have been adjusted.

Average selling prices

In Q2 2019, coking coal selling prices moved in line with global benchmarks.

In Q3 2019, raw coal production is expected to decline QoQ due to the longwall move at the Uskovskaya mine. Output will also be impacted by reduced production at Razrez Raspadsky due to the transfer of its equipment to the open-pit mining operations at the Raspadskaya-Koksovaya mine.

Notes:

Semi-finished products include slabs, billets, pipe blanks and other semi-finished products.

Construction products include beams, channels, angles, rebars, wire rods, wire and other construction products.

Railway products include rails, wheels, tyres and other railway products.

Flat-rolled products include commodity plate, specialty plate and other flat products.

Tubular products include large-diameter line pipes, ERW pipes and casings, seamless pipes and other tubular products.

Other steel products include rounds, grinding balls, mine uprights, strips, etc. They also include railway products for Ukraine.

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For further information:

Media Relations:

London: +44 207 832 8998                               Moscow: +7 495 937 6871

media@evraz.com

Investor Relations:

London: +44 207 832 8990                              Moscow: +7 495 232 1370

ir@evraz.com

EVRAZ is a vertically integrated steel, mining and vanadium business with operations in the Russian Federation, Kazakhstan, US, Canada, Czech Republic and Italy. EVRAZ is among the top steel producers in the world based on crude steel production of 13mt in 2018. A significant portion of the company's internal consumption of iron ore and coking coal is covered by its mining operations. The company's consolidated revenues for the year ended 31 December 2018 were US$12,836m and consolidated EBITDA amounted to US$3,777m.